High utilisation on store card

pacpac2018

Hi, I have an Argos card with £750 limit and have used £700. The £700 is due for payment October 2019, then in full. Will this relative high credit utilisation be seen as negative by lenders? Any point in reducing it, or paying it down earlier?

[Deleted User]

If it's on a 0% promo, that will reduce the negative impact. However, not carrying the debt would generally be better, although it's only a small amount.

Much depends on your wider circumstances.

pacpac2018

It is 0% interest for a year, so a good deal. I tend to nearly max out each credit line every month, then settle in full a couple of days after statement date. I might maintain debt (but pay off interests) if the cost of the debt is lower than return on other assets. This works best for me. I make the most of free/low cost access to capital as much as I can. However, when looking at my credit files over a number of months, the score/rating goes up/down like there is no tomorrow... After reading this forum I get that the score/rating number does not really mean anything. When looking back, my best option is to keep a good relation with the credit suppliers I have, whom tend to increase the limits frequently, and not enter into any new ones. All dots on the credit files are green, no CCJs or Cifas marks.

System

Currently it isn't a problem for you. The score doesn't matter and you only spend what you have so you could easily clear the debt in full a few months before you want to take out a loan or mortgage.

The problem will happen if you have no emergency fund, something happens and you can no longer clear that debt so if you have no savings you may want to build some up just in case.

PRAISETHESUN

Lenders will look at credit utilisation across individual cards, as well as across all cards - so if you have a high combined credit limit across all cards and this is the only one maxed out then the impact will lessen somewhat, but it will still be seen negatively. Even if you have the capital to pay it off, lender's don't see/know this so it can't be factored into any credit applications.

I'd also suggest that you don't stress yourself over the score as no-one but you will ever see it. Lenders will judge you solely on the contents of your credit file, not the score, so your credit history is most important.